Outperform (17E TP Bt15.80) Company Update
BCPG
Outperform (17E TP Bt15.80)
Company Update
Close Bt14.60
Energy & Utilities June 30, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
Granted only 8.94MW from solar phase II Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.143
1.356
KT ZMICO vs. consensus Share data
‐1.1%
4.7%
Reuters / Bloomberg
BCPG.BK/BCPG TB
Paid‐up Shares (m)
1,991.33
Par (Bt)
5.00
Market cap (Bt bn / US$ m)
29.00/855.00
Foreign limit / actual (%)
49.00/0.81
52 week High / Low (Bt)
15.90/10.60
Avg. daily T/O (shares 000)
37,947.00
NVDR (%)
1.17
Estimated free float (%)
29.58
Beta
1.43
URL
www.bcpggroup.com
CGR
‐
Anti‐corruption
n.a.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Exaggerated correction of share price; promising growth ahead BCPG’s share price has negatively overreacted to the result of solar Phase II with a 3% drop in the price over the past few days (‐Bt0.50), implying a potential 50MW loss in the solar farm Phase II pie (our estimate calls for every 5MW increase to deliver Bt0.05/share incremental value). Nevertheless, its growth story looks promising, with regional renewable projects as the main catalyst, particularly in the case of geothermal projects in Indonesia that will kick‐off their contribution in 2H17E, with their base load generation likely to have 3‐4x higher revenue generation/MW than Thailand solar FiT and attractive 12‐15% equity IRR. Thus, we maintain Outperform on BCPG. About 171.52MW out of the 219MW quota granted for solar Phase II The Energy Regulatory Commission (ERC) formally announced the results of solar cooperatives and state agencies Phase II (28 Jun., 2017), with 38 projects totaling 171.52MW passing the lottery round, comprising 27 projects from solar cooperatives totaling 119MW (on par with the quota) and 11 projects from state agencies totaling 52.52MW (out of the 100MW quota). This implies a highly competitive ratio of 1:25 for solar cooperatives and 1:2.5 for solar agencies, compared to the sizable MW passing the qualifying round of 2,989MW and 130MW, respectively. Next, those on the shortlist have to submit a request for proposals and sales of electricity to ERC during 29 Jun‐9 Oct, 2017, with the winners to be announced by 3 Nov‐17. Meanwhile, the schedule for the power purchase agreement is planned within 2 Mar., 2018 under the FiT scheme (at Bt4.12/KWhr for 25 years) and the COD target is within 30 Dec., 2018. BCPG granted 8.94MW, implying only a 45% success ratio BCPG got a total of 8.94MW from the lottery round, all of it from solar state agencies and none from solar cooperatives (out of 38MW and 15MW, respectively, passing the qualifying round), implying only a 45% success ratio from its 20MW target for solar Phase II. This small increase in capacity brings its power portfolio to 491MW in total, halfway to its long‐term 1,000MW target. Meanwhile, the possible MW to fill in the gap includes potential SPP projects locally under the ERC’s next power purchase scheme from SPP Hybrid (firm contract) totaling 300MW in Jul‐ 17 (with its expected 10% share of the pie, ~30MW), as well as potential renewable projects regionally. Minimal value added from solar farm Phase II Given the expected 12% equity IRR under the FiT scheme at Bt4.12/kWh for the 25‐year power purchase agreement and the assumed lower investment cost of Bt45mn/MW, we expect the 8.94MW increase under the solar Phase II scheme to deliver projected revenue of Bt6mn/MW, a profit contribution of Bt2mn/MW, and incremental value of Bt0.1/share on top of our current SOTP‐based TP of Bt15.8/share. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) ‐ weighted EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 3,024 2,147 2.82 11.05 3.45 5.31 2015 5.19 6.15 2.75 23.6% 49.2% 171.5%
2016 3,084 1,541 1.46 (47.98) 0.69 6.79 2016 9.97 12.73 2.15 4.7% 17.7% 19.2%
2017E 3,696 2,257 1.13 (22.56) 0.68 7.25 2017E 12.87 15.70 2.01 4.7% 16.2% 124.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 4,200 2,832 1.42 25.51 0.85 7.82 2018E 10.26 14.64 1.87 5.8% 18.9% 166.7%
2019E 5,475 3,306 1.66 16.71 1.00 8.48 2019E 8.79 11.79 1.72 6.8% 20.4% 181.2%
Figure 1: Solar cooperatives and state agencies Phase II ‐ number of projects and granted capacity (MW) in the lottery round Solar state agencies Solar co‐operative Area No. of Granted Target No. of Granted Target projects Capacity Capacity projects Capacity Capacity (MW) (MW) (MW) (MW) Bangkok and Metropolitan 5 25.00 25.00 Central region 1 5.00 5.00 Western region 3 13.94 15.00 2 8.58 10.00 Eastern region Northern region ‐ ‐ 5.00 5 19.00 19.00 ‐ ‐ 20.00 11 50.00 50.00 Northeastern region Southern region ‐ ‐ 20.00 11 50.00 50.00 Total 11 52.52 100.00 27 119.00 119.00 Source: www.erc.or.th
Figure 2: BCPG’s power capacity in the portfolio Source: KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Fully diluted core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Minority interests Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 2,692 (556) 2,136 (27) 2,540 430 2,110 (272) 28 1,865 (5) 0 0 0 0 1,861 2.54 2.51 1,861 2.51 2.45
2015 3,024 (624) 2,400 (45) 2,833 478 2,355 (208) 14 2,160 (11) (2) 0 0 0 2,147 2.82 2.90 2,149 2.90 3.45
2016 3,084 (822) 2,262 (416) 2,447 602 1,845 (349) 70 1,566 19 (86) 43 0 0 1,541 1.46 0.77 1,585 0.80 0.69
2017E 3,696 (1,018) 2,678 (403) 2,971 696 2,275 (527) 32 1,780 (24) 0 62 439 0 2,257 1.13 1.13 2,195 1.10 0.68
2018E 4,200 (1,274) 2,926 (430) 3,372 877 2,495 (726) 32 1,801 (62) 0 0 1,093 0 2,832 1.42 1.42 2,832 1.42 0.85
2019E 5,475 (1,932) 3,543 (487) 4,401 1,344 3,057 (769) 32 2,320 (152) 0 0 1,138 0 3,306 1.66 1.66 3,306 1.66 1.00
2014 1,017 547 0 10,656 34 12,254 438 6,879 7,451 3,700 4,803 0 12,254
2015 975 456 0 10,220 21 11,671 656 6,939 7,741 3,700 3,930 0 11,671
2016 8,061 1,119 0 14,195 2,114 25,489 1,194 8,956 11,972 9,950 13,517 0 25,489
2017E 1,282 810 0 17,227 14,739 34,057 3,727 15,128 19,638 9,950 14,419 0 34,057
2018E 810 920 0 25,689 15,352 42,772 1,353 19,771 27,220 9,950 15,552 0 42,772
2019E 733 1,200 0 30,756 15,990 48,680 1,937 21,628 31,805 9,950 16,874 0 48,680
2014 1,861 0 430 (308) 1,983 (3,457)
2015 2,147 2 478 139 2,766 (41)
2016 1,541 86 602 526 2,756 (4,577)
2017E 2,257 0 696 (1,114) 1,839 (16,288)
2018E 2,832 0 877 (1,169) 2,540 (9,886)
2019E 3,306 0 1,344 (1,290) 3,360 (6,981)
(3,457) 7,317 464 (1,810) (2) 5,969 4,495 (1,474) (1.99)
(41) 7,595 (469) (2,552) (25) 4,549 7,274 2,725 3.68
(4,577) 10,150 9,418 (1,373) (1,693) 16,502 14,681 (1,821) (0.92)
(16,288) 18,854 415 (1,354) (94) 17,821 3,371 (14,450) (7.26)
(9,886) 21,124 1,031 (1,699) (66) 20,389 13,043 (7,346) (3.69)
(6,981) 23,564 986 (1,983) (68) 22,498 18,877 (3,621) (1.82)
2014 84.1 85.3 30.7 79.4 94.3 78.4 69.1 69.1 0.2
2015 12.3 11.5 11.0 79.4 93.7 77.9 71.0 71.1 0.5
2016 2.0 (13.6) (48.0) 73.3 79.3 59.8 50.0 51.4 (1.2)
2017E 19.8 21.4 (22.6) 72.5 80.4 61.6 61.1 59.4 1.4
2018E 13.6 13.5 25.5 69.7 80.3 59.4 67.4 67.4 3.5
2019E 30.4 30.5 16.7 64.7 80.4 55.8 60.4 60.4 6.6
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD, EVER. KT ZMICO is a co‐underwriter of the IPO of BGRIM.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Outperform (17E TP Bt15.80)
Company Update
Close Bt14.60
Energy & Utilities June 30, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
Granted only 8.94MW from solar phase II Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.143
1.356
KT ZMICO vs. consensus Share data
‐1.1%
4.7%
Reuters / Bloomberg
BCPG.BK/BCPG TB
Paid‐up Shares (m)
1,991.33
Par (Bt)
5.00
Market cap (Bt bn / US$ m)
29.00/855.00
Foreign limit / actual (%)
49.00/0.81
52 week High / Low (Bt)
15.90/10.60
Avg. daily T/O (shares 000)
37,947.00
NVDR (%)
1.17
Estimated free float (%)
29.58
Beta
1.43
URL
www.bcpggroup.com
CGR
‐
Anti‐corruption
n.a.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Exaggerated correction of share price; promising growth ahead BCPG’s share price has negatively overreacted to the result of solar Phase II with a 3% drop in the price over the past few days (‐Bt0.50), implying a potential 50MW loss in the solar farm Phase II pie (our estimate calls for every 5MW increase to deliver Bt0.05/share incremental value). Nevertheless, its growth story looks promising, with regional renewable projects as the main catalyst, particularly in the case of geothermal projects in Indonesia that will kick‐off their contribution in 2H17E, with their base load generation likely to have 3‐4x higher revenue generation/MW than Thailand solar FiT and attractive 12‐15% equity IRR. Thus, we maintain Outperform on BCPG. About 171.52MW out of the 219MW quota granted for solar Phase II The Energy Regulatory Commission (ERC) formally announced the results of solar cooperatives and state agencies Phase II (28 Jun., 2017), with 38 projects totaling 171.52MW passing the lottery round, comprising 27 projects from solar cooperatives totaling 119MW (on par with the quota) and 11 projects from state agencies totaling 52.52MW (out of the 100MW quota). This implies a highly competitive ratio of 1:25 for solar cooperatives and 1:2.5 for solar agencies, compared to the sizable MW passing the qualifying round of 2,989MW and 130MW, respectively. Next, those on the shortlist have to submit a request for proposals and sales of electricity to ERC during 29 Jun‐9 Oct, 2017, with the winners to be announced by 3 Nov‐17. Meanwhile, the schedule for the power purchase agreement is planned within 2 Mar., 2018 under the FiT scheme (at Bt4.12/KWhr for 25 years) and the COD target is within 30 Dec., 2018. BCPG granted 8.94MW, implying only a 45% success ratio BCPG got a total of 8.94MW from the lottery round, all of it from solar state agencies and none from solar cooperatives (out of 38MW and 15MW, respectively, passing the qualifying round), implying only a 45% success ratio from its 20MW target for solar Phase II. This small increase in capacity brings its power portfolio to 491MW in total, halfway to its long‐term 1,000MW target. Meanwhile, the possible MW to fill in the gap includes potential SPP projects locally under the ERC’s next power purchase scheme from SPP Hybrid (firm contract) totaling 300MW in Jul‐ 17 (with its expected 10% share of the pie, ~30MW), as well as potential renewable projects regionally. Minimal value added from solar farm Phase II Given the expected 12% equity IRR under the FiT scheme at Bt4.12/kWh for the 25‐year power purchase agreement and the assumed lower investment cost of Bt45mn/MW, we expect the 8.94MW increase under the solar Phase II scheme to deliver projected revenue of Bt6mn/MW, a profit contribution of Bt2mn/MW, and incremental value of Bt0.1/share on top of our current SOTP‐based TP of Bt15.8/share. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) ‐ weighted EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 3,024 2,147 2.82 11.05 3.45 5.31 2015 5.19 6.15 2.75 23.6% 49.2% 171.5%
2016 3,084 1,541 1.46 (47.98) 0.69 6.79 2016 9.97 12.73 2.15 4.7% 17.7% 19.2%
2017E 3,696 2,257 1.13 (22.56) 0.68 7.25 2017E 12.87 15.70 2.01 4.7% 16.2% 124.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 4,200 2,832 1.42 25.51 0.85 7.82 2018E 10.26 14.64 1.87 5.8% 18.9% 166.7%
2019E 5,475 3,306 1.66 16.71 1.00 8.48 2019E 8.79 11.79 1.72 6.8% 20.4% 181.2%
Figure 1: Solar cooperatives and state agencies Phase II ‐ number of projects and granted capacity (MW) in the lottery round Solar state agencies Solar co‐operative Area No. of Granted Target No. of Granted Target projects Capacity Capacity projects Capacity Capacity (MW) (MW) (MW) (MW) Bangkok and Metropolitan 5 25.00 25.00 Central region 1 5.00 5.00 Western region 3 13.94 15.00 2 8.58 10.00 Eastern region Northern region ‐ ‐ 5.00 5 19.00 19.00 ‐ ‐ 20.00 11 50.00 50.00 Northeastern region Southern region ‐ ‐ 20.00 11 50.00 50.00 Total 11 52.52 100.00 27 119.00 119.00 Source: www.erc.or.th
Figure 2: BCPG’s power capacity in the portfolio Source: KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Fully diluted core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Minority interests Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 2,692 (556) 2,136 (27) 2,540 430 2,110 (272) 28 1,865 (5) 0 0 0 0 1,861 2.54 2.51 1,861 2.51 2.45
2015 3,024 (624) 2,400 (45) 2,833 478 2,355 (208) 14 2,160 (11) (2) 0 0 0 2,147 2.82 2.90 2,149 2.90 3.45
2016 3,084 (822) 2,262 (416) 2,447 602 1,845 (349) 70 1,566 19 (86) 43 0 0 1,541 1.46 0.77 1,585 0.80 0.69
2017E 3,696 (1,018) 2,678 (403) 2,971 696 2,275 (527) 32 1,780 (24) 0 62 439 0 2,257 1.13 1.13 2,195 1.10 0.68
2018E 4,200 (1,274) 2,926 (430) 3,372 877 2,495 (726) 32 1,801 (62) 0 0 1,093 0 2,832 1.42 1.42 2,832 1.42 0.85
2019E 5,475 (1,932) 3,543 (487) 4,401 1,344 3,057 (769) 32 2,320 (152) 0 0 1,138 0 3,306 1.66 1.66 3,306 1.66 1.00
2014 1,017 547 0 10,656 34 12,254 438 6,879 7,451 3,700 4,803 0 12,254
2015 975 456 0 10,220 21 11,671 656 6,939 7,741 3,700 3,930 0 11,671
2016 8,061 1,119 0 14,195 2,114 25,489 1,194 8,956 11,972 9,950 13,517 0 25,489
2017E 1,282 810 0 17,227 14,739 34,057 3,727 15,128 19,638 9,950 14,419 0 34,057
2018E 810 920 0 25,689 15,352 42,772 1,353 19,771 27,220 9,950 15,552 0 42,772
2019E 733 1,200 0 30,756 15,990 48,680 1,937 21,628 31,805 9,950 16,874 0 48,680
2014 1,861 0 430 (308) 1,983 (3,457)
2015 2,147 2 478 139 2,766 (41)
2016 1,541 86 602 526 2,756 (4,577)
2017E 2,257 0 696 (1,114) 1,839 (16,288)
2018E 2,832 0 877 (1,169) 2,540 (9,886)
2019E 3,306 0 1,344 (1,290) 3,360 (6,981)
(3,457) 7,317 464 (1,810) (2) 5,969 4,495 (1,474) (1.99)
(41) 7,595 (469) (2,552) (25) 4,549 7,274 2,725 3.68
(4,577) 10,150 9,418 (1,373) (1,693) 16,502 14,681 (1,821) (0.92)
(16,288) 18,854 415 (1,354) (94) 17,821 3,371 (14,450) (7.26)
(9,886) 21,124 1,031 (1,699) (66) 20,389 13,043 (7,346) (3.69)
(6,981) 23,564 986 (1,983) (68) 22,498 18,877 (3,621) (1.82)
2014 84.1 85.3 30.7 79.4 94.3 78.4 69.1 69.1 0.2
2015 12.3 11.5 11.0 79.4 93.7 77.9 71.0 71.1 0.5
2016 2.0 (13.6) (48.0) 73.3 79.3 59.8 50.0 51.4 (1.2)
2017E 19.8 21.4 (22.6) 72.5 80.4 61.6 61.1 59.4 1.4
2018E 13.6 13.5 25.5 69.7 80.3 59.4 67.4 67.4 3.5
2019E 30.4 30.5 16.7 64.7 80.4 55.8 60.4 60.4 6.6
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Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD, EVER. KT ZMICO is a co‐underwriter of the IPO of BGRIM.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
